Why June Will Be The Best Month For Closed Sales in the First Half of the Year

David Bates / June 15, 2011-2:18 am

This blog predicts that June will be the best month of the year so far for closed sales. Why? In real estate, there is a natural sequence of events. First, a home gets shown. Then, a home gets an accepted offer. When the offer clears all the inspection and financing hurdles, typically 25-45 days later, the home sells. So if you understand what is happening with requests for home showings now, you can predict what will happen in the sales market in the future, between 25-45 days later. Simply put: The more showings you have now, the more sales that will be recorded in the future.

MA-PASS, a company that coordinates between listing agents and sales agents hundreds of thousands of Massachusetts home showings annually, recently shared the comparative showing volume data for the first five months of 2010 and 2011. Because the listings represented weren’t the same volume in the comparative months, it wasn’t quite apples-to-apples, but the listing numbers were close enough that any significant change in the showing volume should manifest as a change in the sales volume in the following month or two.

The Bates Real Estate Report then compared the showing volume changes to the subsequent sales volume changes.

* Showing volume dropped nearly 25 percent in January 2011 versus January 2010 and the comparative sales volume dropped 16 percent in February. Home showing requests slowed 26 percent in February and sales transactions in March were slowed to 18 percent  below the 2010 total.

* In March, home showing requests bounced back slightly (down 19 percent compared to March 2010), but the momentum caused by disastrous previous months caused April to be the worst comparative month for closed sales transactions this year (down a whopping 24 percent).

* All told, bad weather and a lack of a government incentives may have combined to cause a 23 percent reduction in showing requests for January through March, and the drop in home showings certainly resulted in a 20 percent reduction in sales February through April.

The good news is that May’s monster showing requests, up 11 percent vs. May 2010, should result in June being the best comparative month of the first half of the year.